Good Morning from Allendale, Inc. with the early morning commentary for February 26, 2020.
Grain markets traded in a tight range as they were under pressure from mounting fears from the Coronavirus outbreak as new cases sharply rose in South Korea, Italy and Iran. Traders will continue to monitor the spreading of the outbreak and whether it grows into a pandemic situation.
U.S. CDC alerted Americans to begin preparing for the spread of coronavirus in the United States after infections surfaced in several more countries. “The data over the past week about the spread in other countries has raised our level of concern and expectation that we are going to have community spread here,” Dr. Nancy Messonnier, the CDC’s head of respiratory diseases.
U.S. Trade Representative Lighthizer will meet with Britain’s trade minister Liz Truss this week, British government officials said. Truss said Britain would seek large reductions in U.S. tariffs that would run alongside negotiations over its future relationship with the E.U. The U.S. is expected to face fierce resistance in Britain to U.S.-grown genetically modified crops and meat treated with hormones and antibacterial washes. (Reuters)
John Deere & Co. is teaming up with the “Uber of tractors” in Africa and betting on a future where farmers summon machines with the touch of a button. The world’s leading farm equipment maker is outfitting its tractors with startup Hello Tractor’s technology, which allows farmers to hail the machines via an app, monitors the vehicles’ movements and transmits usage information such as fuel levels. (Reuters)
Malaysian palm oil futures hit a four-month low, pressured by falling exports and a delay in the economic stimulus package amid political turmoil. Malaysia’s Mahathir Mohamad unexpectedly quit as prime minister but was immediately reappointed as interim premier and then separated the cabinet, sending local currency, bond and stock markets sharply lower.
Saudi Arabia’s energy minister said he was confident OPEC and its partner oil-producing nations (the OPEC+ group) would respond responsibly to the spread of the coronavirus. “We think this is short term and I am confident that in the second half of the year there is going to be an improvement on the demand side, especially from China,” said Saudi Aramco CEO, Amin Nasser.
E.U. said talks on post-Brexit ties with Britain would kick off early next week but warned that the process would be “very hard” and could fail if London fails to secure the Irish border as previously agreed. “If there isn’t progress on the infrastructure needed… in the next few months, that’s going to be a very worrying signal for whether or not it’s going to be possible to conclude something sensible before the end of the year,” Irish Foreign Minister Simon Coveney said.
Cash cattle prices traded at $115 yesterday in Kansas. This is $5 lower from last week’s average Southern trade levels. Soon after yesterday’s open, lower trade was noted as a new low for the downtrend was made again.
Lean hog futures trade was mixed with higher prices seen in the deferred months. Some traders believe the monthly Cold Storage report gave us the firepower to test higher future prices, since January is a large stock building month, +74 million lbs. over the previous five years compared to +45 million lbs. this year. This was the smallest January increase in the last 10 years.
Dressed beef values were mixed with choice up 0.40 and select down 2.47. The Feeder cattle index was at 139.72. Pork cut-out values were down 0.35.